UUGRY
United Utilities Group PLC
$36.68
Stable Earnings Power
85%
P/Adj-EPS × Normalized Multiple
Mild
·
Conviction
Fair Value
Trading 2.2% below fair value
You pay
$36.68
Bear
$32.83
Fair
$37.52
Bull
$42.21
Bear
$32.83
-10.5%
$2.34 × 14x P/E
Fair
$37.52
+2.3%
$2.34 × 16x P/E
Bull
$42.21
+15.1%
$2.34 × 18x P/E
Key Value Driver
Normalized P/E multiple (16x base case)
Implied Market Multiple
15.6x
Summary
Applying a 16x P/E to adjusted EPS of $2.34, the base-case value is $37.52 per share. DDM cross-check: $146.68.
Warnings
The company pays out 118% of its profits as dividends. That leaves little cushion — the dividend could be cut if business slows down.
Dividend-based valuation: $146.68 (above our primary estimate by 291%). Large gaps may signal the dividend doesn't reflect full earning power.
Financial statements were converted from GBP into USD using GBPUSD at 1.3476 USD per GBP.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples